The Australian share market opened almost three per cent lower, with losses across all sectors, after world markets tumbled on the shock resignation of the head of the European Central Bank.
At 1016 AEST the benchmark S&P/ASX200 index was down 120.6 points, or 2.9 per cent, at 4,074.1 points, while the broader All Ordinaries index fell 114.6 points, or 2.7 per cent, to 4,162.8 points.
On the ASX 24, the September share price index futures contract lost 102 points at 4,074 points on a volume of 24,672 contracts.
RBS Morgans private client adviser Bill Bishop said the start was even poorer than the futures market had expected after weak offshore leads stemmed from investor fears that Greece would default on its massive mountain of debt.
“We don’t have a wall of selling and we don’t have any enthusiastic buyers, much as we’d like to see them,” Mr Bishop said.
US investors were responding to President Barack Obama’s jobs stimulus plan, announced on Friday, with many displaying little confidence that it would be passed by Congress.
US stocks plunged on Friday, with the Dow Jones Industrial Average sliding more than 300 points, as global stock markets were stung by increased anxiety in the eurozone over Greece’s bailout.
In the US, the Dow fell 303.68 points (2.69 per cent) to close at 10,992.13. The broader S&P 500 fell 31.67 points (2.67 per cent) to 1,154.23, while the tech-heavy Nasdaq Composite shed 61.15 points (2.42 per cent) to 2,467.99.
Early losses on Wall Street accelerated after the unexpected news that the European Central Bank’s chief economist, Juergen Stark, was resigning “for personal reasons”.
Hours after his resignation was announced, Stark called for drastic reforms to the eurozone, as ECB watchers suggested that the bank was deeply split over its handling of Europe’s sovereign debt crisis.
“On days like this … it’s very easy to get out of big stocks. Banks, BHP, Rio, those liquid stocks often get sold down,” he said.
“Certainly there’s an offshore influence, but they’re also marked down because they’re easy to sell, it’s nothing to do with performance of the companies.”
Among the miners, BHP Billiton lost $1.11 or 2.9 per cent to $36.80.
Fellow miner Rio Tinto plummeted $2.48, or 3.5 per cent, to $68.77.
Energy stocks and financials were hardest hit, opening at 3.3 per cent and 3.2 per cent lower respectively.
The weakest stock in the top 20 was Suncorp Group Ltd, which lost 4.2 per cent, or 35 cents, to $7.97.
Gold stocks were one of the few bright spots on the market, with Australia’s biggest gold miner Newcrest Mining up seven cents to $39.93 and AngloGold Ashanti 26 cents, or three per cent, higher at $8.88.
The spot price of gold in Sydney was $US1,852.05 per fine ounce, down $US20.95 from Friday’s local close at $US1,873.00.
National turnover was 3.59 million securities changing hands for $4.59 million, with 105 stocks up, 579 down and 210 steady.
